You may receive a non-refundable tax credit (not to exceed $1,000) for contributions made to Traditional and Roth IRAs. If you are eligible, the tax credit equals the applicable percentage on up to $2,000 of a "qualified retirement savings contribution" which includes annual Traditional and Roth IRA contributions. Eligibility requirements include:
- You need to turn 18 years before the end of the taxable year
- You can't be a dependent or a full-time student
- You need to have adjusted gross income (AGI) within limits
See the chart below for eligible income levels and the applicable percentage used to calculate the tax credit:
Contributions
Joint Return | Head of Household | All Other Cases | Applicable percentage |
Over | Not over | Over | Not over | Over | Not over | |
$0 | $37,000 | $0 | $27,750 | $0 | $18,500 | 50% |
$37001 | $40,000 | $27,751 | $30,000 | $18,501 | $20,000 | 20% |
$40,001 | $62,000 | $30,001 | $46,500 | $20,001 | $31,000 | 10% |
$62,000 | | $46,500 | | $31,000 | | 0% |
Please consult a tax professional